Company cars can be a cost efficient solution in the sense that Contract Hire companies can acquire cars more cheaply than individuals due to volume discounts.

Thus, they can recover VAT on the purchase and may be able to fund them more cheaply.

There are also additional savings to be had from managing maintenance costs professionally.

Conversely, against the above advantages you have to weigh the additional cost borne by the driver in the form of the CO2 scale charge and also the National Insurance Cost (NIC) on the scale charge payable by the employer.

Class 1A NICs are calculated using information reported on P11Ds. If drivers are helped or encouraged to choose cars with lower tax, there will be a large saving on the fleet’s Class 1A NI bill.

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